Subscribe To E4O

Sunday, March 30, 2008

A rare technical note for those who might want to know: Blogger's online interface is a bit clunky, so I've been trying out various offline blog editor programs. So far I'm very happy with the free download Qumana.

Although I can't vouch for the specific figures cited, I think this NY Times article has it generally right. Obama, Hillary, and leading Congressional Democrats all say that their single objection to the Colombia trade pact is that Colombia needs to do more to prevent killings of union members. But as the article notes, Colombia has been a violent place all around--murder rates of union members in 2007 were actually way below the murder rate for the population at large. And the murders of union members were only related to union activity in a minority of cases. On top of that, the murder rate has declined dramatially in recent years, and the government has convicted many of the killers of union members.

As I noted in an earlier post, polls show that the trade agreement is overwhelmingly popular in Colombia. I think this is because Colombians recognize that the accord will help lift many of the country's people out of poverty. I think it's almost impossible to imagine that the agreement passes during this election year, but I hope President Obama pushes for its approval.

By the way, as someone with professional and personal connections to Colombia, I often wish I had a good reference to point people to in order to explain what the FARC guerrilla group there is about. I still don't have any suggestions in English, but today Spain's El Pais had this very good article in Spanish, which gives a good description of the FARC, emphasizing the key point, which is that while decades ago the group had populist/leftist ideals, it is now basically a criminal enterprise that funds itself through drug trafficking and kidnapping.

Saturday, March 29, 2008

While registering voters in Philadelphia a couple weeks ago, I picked up a bumper sticker, which I later cut up, and stuck on the back of my motorcycle, as shown, finally replacing the faded Dean for America sticker I affixed more than five years ago.

Friday, March 28, 2008

I just wrote the post suggesting that Doug Holtz-Eakin has flushed his credibility down the toilet by claiming that McCain said the opposite of what he actually said in his housing crisis speech, and then I received the invitation to this event with Holtz-Eakin. I will try to go and ask him about this myself. The regulatory question is an obvious one, but sometimes people at these events don't ask the obvious questions. Please provide other suggested questions in comments!

Via Glenn Greenwald, here's a video of a Charlie Rose interview with two Iraqis--something you rarely see in the U.S. press. One snippet:

CHARLIE ROSE: OK. Would you like for the United States military -- Senator Barack's proposal is that we make a date certain, within 16 months, withdraw. Is that a wise policy, in your judgment?

ALI FADHIL: Definitely. Definitely.

CHARLIE ROSE: Just get out of Iraq in some kind of ordered way?

ALI FADHIL: ... for us we need to get rid of the Americans, because the Americans just don't know what they are doing.

They are -- anything they do -- probably even in good intentions -- is bad for us, everything they do, everything. There's nothing they're doing is right.And that's what is going to happen. It's just prolonging the diaspora of the Iraqis.We're suffering more and more every day. We need, you know, to start the solution.

One of McCain's economic advisers is Doug Holtz-Eakin, who had a reputation as director of the Congressional Budget Office as an economist with integrity. Since he signed on with McCain, he has seemed determined to shred that reputation.

On Tuesday, McCain gave a much ridiculed speech on the housing crisis on Tuesday. The main components of McCain's plan, apart from some eat-your-peas moralizing, were calling for a meeting of accountants (I'm serious) and to ask mortgage lenders to "pledge" to help. (Since when did economic policy become like signing up people to donate for a walk-a-thon?)

The most ominous piece of McCain's speech was his line about the importance of "removing regulatory impediments to raising capital." Among everyone except the most deranged right-wingers, it's clear that the crisis illustrates the need for more regulation of the financial system.

Then, yesterday Obama gave a thoughtful speech on the crisis which put financial regulation in a broad historical perspective and laid out details on how to address the crisis, including through a new regulatory regime.

Speaking for McCain, Holtz-Eakin said, "I don't think there is any grand disagreement about the need for effective regulation. The bottom line that Senator Obama came up with is what Senator John McCain said on Tuesday."

In fact, McCain said exactly the opposite of what Obama said. Did Holtz-Eakin get training in Orwellian up-is-downism talk, or is it a virus that he acquired by close proximity to McCain?

Monday, March 17, 2008

Today's NY column by Bill Kristol is a classic hit piece and makes it clear for anyone who might have had any doubts that Kristol's column is a mainline pipe of the Republicans' propaganda sewage system.

The entire column rests on the assertion that Obama attended a service at his church last July where the minister spoke in charged terms about racism. The Obama campaign says Obama was not there, and Marc Ambinder has a video of him in Miami the same day.

Kristol cites Ronald Kessler, "a journalist who has written about Wright's ministry," for his falsehood. Kessler is not an innocent unbiased reporter but rather a writer for the right-wing site Newsmax.com. But Kessler himself cites someone else for the claim, "freelancer" Jim Davis, who says that he intended the sermon in question. Who's Jim Davis? No idea ... besides his one post on Newsmax about Obama's church, the only other article I could find by Jim Davis is another Newsmax rant complaining about liberal bias in Wikipedia.

Shorter version of Kristol's column:

Some guy told a right-wing hack I know that Obama heard his minister say that we white people run this country.

Sunday, March 16, 2008

We're on the way back from Philly after spending the day registering people to vote. My non-economist friend George and I worked a mall in Cheltenham for most of the day. The most striking fact was that the overwhelming majority of people we talked to had already registered. I also learned that the Pennsylvania voter registration form is so poorly designed that very few people fill it out correctly without assistance. See the previous post for a photo of Obama volunteers studying the form during the training session I attended. (I will try to do a full post later on the problems with the form.)

Notable encounters:

* One 40-something gentleman I signed up said he hadn't voted in over 20 years and was excited to vote for Obama.* We registered one woman who was wearing a burka. I wondered if all the Obama-is-Muslim misinformation makes her MORE likely to vote for Obama.* One woman was talking on her cellphone the whole time she was filling out the form and said, "Baby, are you registered to vote? Baby, you've got to get yourself down here to register NOW!"* An African-American woman filled out the form and left it with me and then came back a second time, saw my Obama sticker and said "Oh, you're Democrats so it's OK. I was worried that if you were Republicans you might take my form and throw it away." She was laughing but not joking.* We had lunch at Big Daddy's BBQ, where Roxanne treated us right and served us up plates of chopped beef and cornbread.* For the first hour we were at the mall, not many people were there so we didn't have much success. We did, however, score some free moisturizing lotion when we made friends with Russel, the owner of the Dead Sea Secrets lotion stand, who had signed up to register the day before with another group of Obama supporters. Below is a photo of George when the owner left us watching the stand while he went outside for a smoke. We didn't manage to sell any lotion, but we did sign up a bunch of voters.

Friday, March 14, 2008

There's a blog for a website called "Lawyers for Obama" but there isn't any content up there yet so let me pinch hit as an economist for Obama.

A highly overlooked issue in this campaign is civil liberties. The perpetual war state developed by Bush and Rove has already eroded civil liberties and its restoration should be a major priority. One hopeful sign is the recent discovery of backbone by the House, Bush might actually have a fight on his hands over civil liberties with the FISA bill.

Obama is not a newcomer to thinking about civil liberties as you might imagine as a former law professor himself. Cass Sunstein, a law professor at the University of Chicago wrote a great piece today where he described his discussions with Obama about FISA.

In the space of about 20 minutes, he and I investigated the legal details. He asked me to explore all sorts of issues: the President's power as commander-in-chief, the Constitution's protection against unreasonable searches and seizures, the Foreign Intelligence Surveillance Act, the Authorization for Use of Military Force and more.

Obama wanted to consider the best possible defence of what Bush had done. To every argument I made, he listened and offered a counter-argument. After the issue had been exhausted, Obama said that he thought the programme was illegal, but now had a better understanding of both sides. He thanked me for my time.

This was a pretty amazing conversation, not only because of Obama's mastery of the legal details, but also because many prominent Democratic leaders had already blasted the Bush initiative as blatantly illegal. He did not want to take a public position until he had listened to, and explored, what might be said on the other side.

In this little referenced op ed in the New York Times earlier this month, George Washington University Law Professor Jeffrey Rosen makes the case for why Obama's the candidate of choice:

Throughout his career, Mr. Obama has been more consistent than Hillary Clinton on issues from the Patriot Act to bans on flag burning. At the same time, he has reached out to Republicans and independents to build support for his views. Mrs. Clinton, by contrast, has embraced some of the instrumental tacking of Bill Clinton, whose presidency disappointed liberal and conservative civil libertarians on issue after issue.

Mr. Obama made his name in the Illinois Legislature by championing historic civil liberties reforms, like the mandatory recording of all interrogations and confessions in capital cases. Although prosecutors, the police, the Democratic governor and even some death penalty advocates were initially opposed to the bill, Mr. Obama won them over. The reform passed unanimously, and it has been adopted by four other states and the District of Columbia.

This passage I think is quite important:

The real concern about Hillary Clinton’s record on civil liberties is that her administration would look like that of her husband. Bill Clinton’s presidency had many virtues, but a devotion to civil liberties was not one of them.

Given the well chronicled purging of the civil rights division at the Justice Dept, this is no ordinary time...and in order to inspire the best and brightest to join the DOJ, Obama might make a real difference.

There is an analogous case with respect to economists. My sense is that among center-left economists that it will be tough going trying to get a job on the Obama Council of Economic Advisors as there is a lot of excitement about signing on with a fresh new administration where new ideas might be valued. Although I'm sure there would also be some enthusiasm with Clinton as well (after 8 years of Bush) there's definitely a feeling that she already has her connections to the folks from Bill's administration (e.g. Gene Sperling) and her team will much more likely be a retread of the 90s that already thinks it knows how to run things in Washington.

Thats one downside to the idea that she is "ready on day one"...maybe we need some fresh blood that is, yes, inspired.

Wednesday, March 12, 2008

You've really got to wonder if the ugly Ferraro spectacle isn't deliberate as Will Bunch suggests.

As I was ruminating about the motivations that might have led the Hillary campaign to let Ferraro loose, one thought that occurred to me was that North Carolina is coming up and who can forget this raw appeal to white people's worst fears about a black candidate...that he'll protect his own first:

You know, I thought Orlando Patterson's op ed was over the top in crying racism and Brad Delong reminds us about this stinker Patterson once wrote during Clarence Thomas hearings...but watching Ferraro hit every network today really made me think twice if there wasn't a sliver of truth about the 3AM ad as well.

Tuesday, March 11, 2008

Greg Craig's statement on Hillary's exaggerated foreign policy experience claims is useful chiefly in that it gives me another chance to highlight Craig's excellent C-SPAN interview from last December in which he forcefully lays out the case for Obama.

In Clinton's response to Craig, the lady doth protest too much, methinks. She makes a good case that she met people who liked her on her First Lady foreign jaunts, and some of her friends credit her with being helpful, in Northern Ireland, for example. But it's abundantly clear that she's trying hard way too hard to pump up her trips to sound presidential. This seems clearest in her campaign's account of the Bosnia trip:

The Obama campaign has resorted to mocking Hillary's trip to Bosnia in 1996, belittling it as a U.S.O. tour and saying there was no danger. But Hillary toured the frontlines of the international peacekeeping mission.

Her problem is that it's not just Obama mocking her trip--it's her USO co-star Sinbad, who was there with Clinton and Sheryl Crowe. Sinbad:

In an interview with the Sleuth Monday, he said the "scariest" part of the trip was wondering where he'd eat next. "I think the only 'red-phone' moment was: 'Do we eat here or at the next place.'" ....

"I never felt that I was in a dangerous position. I never felt being in a sense of peril, or 'Oh, God, I hope I'm going to be OK when I get out of this helicopter or when I get out of his tank.'"

In her Iowa stump speech, Clinton also said, "We used to say in the White House that if a place is too dangerous, too small or too poor, send the First Lady."Say what? As Sinbad put it: "What kind of president would say, 'Hey, man, I can't go 'cause I might get shot so I'm going to send my wife...oh, and take a guitar player and a comedian with you.'"

Monday, March 10, 2008

I am guessing that one consequence of Eliot Spitzer's almost certain resignation as governor of New York will be a superdelegate pick-up for Obama. Spitzer has been a superdelegate in Clinton's column, but by resigning, he'll lose his superdelegate slot, which will go to his successor, current Lt. Gov. David Paterson. Paterson has also endorsed Clinton, but reports are that his support is lukewarm. When he endorsed Clinton, he wasn't planning to be a superdelegate, so there's plenty of room for him to say that while he has the greatest respect for Clinton, as a newly hatched superdelegate it's his responsibility to ensure that the winner of both the popular vote and the elected delegate count is the Democratic nominee.

UPDATE: It turns out that Paterson is already a superdelegate by virtue of being a DNC member. That means that unless he resigns his DNC seat, Clinton will lose a superdelegate when he replaces Paterson as Governor.

Sunday, March 9, 2008

This article about McCain's history of cancer made me wonder how likely it is that McCain would survive a full term in office, given his advanced age and the fact that he's had melanoma four times.

If elected, McCain will be 72 when he takes office. According to this actuarial table, the probabilities of death in the following year for an average man at ages 72, 73, 74, and 75 are 3.5%, 3.8%, 4.1%, and 4.5%. These figures tell us that a 72-year-old has a 15% chance of dying within four years, and the fuller series indicates that the 72-year-old has a 33% chance of dying within eight years.

Note that these are average figures, and undoubtedly the survival probabilities are lower for a 72-year-old with a history of cancer. The article on McCain's cancer throws out some figures on the longer run effects of melanoma on survival probabilities. It's hard to apply these to McCain's case because the reported figures are not age-specific. Also, they're from a 1992 study, and treatments and survival probabilities have undoubtedly changed since then.

What does all this mean? Although McCain has taken to insulting people who bring it up, his health and age should be an issue. No doubt it's on the minds of his potential VP picks.

Wednesday, March 5, 2008

I've already seen some misinformation about this on the web, so I think it's important to get the facts clear. On Saturday, the Colombian government killed Raúl Reyes the #2 leader of the FARC guerrilla camp at a remote jungle camp just over the border in Ecuador. At the site, they found a laptop. The laptop held a number of communications between members of the FARC. The documents are here. The documents make clear that there have been extensive contacts between the FARC and the governments of Venezuela and Ecuador.

One of the documents is a message dated February 28, 2008 from Reyes to the FARC high command (the Secretariado.) The message describes a recent conversation with an emissary of Ecuador's President Correa. Here is the last paragraph of the message:

The gringos asked for an appointment with the minister to request that he communicate to us their interest in discussing several topics. They say that the new president of their country will be Obama and that they are interested in their countrymen. Obama will not support either Plan Colombia or the free trade agreement [with Colombia.] We have responded that we are interested in relations with any government under the same conditions, and in the case of the United States, this would require a public statement expressing interest in talking with the FARC, given their eternal war against us.

The "countrymen" are clearly the three American hostages held by the FARC. From another message on the laptop, it is evident that the "minister" is Gustavo Larrea, Ecuador's Security Minister. It is unclear who the "gringos" are exactly. In December, three Democratic congressmen sent a letter to the FARC regarding the hostages. (Here is a Dec. 21 AP article regarding the letter.) It is possible that Reyes is referring to this letter of some other communication with the congressmen.

It seems odd that the American emissaries would make a prediction about the election outcome, but this is Reyes' version of what he was told by the Larrea, and it may not accurately reflect what the "gringos" said. Also, while the message accurately notes that Obama has announced his opposition to the U.S.-Colombia free trade agreement, he is not opposed to Plan Colombia.

In any case, the message does not express the FARC's evaluation or preferences in the U.S. election, but rather what Reyes was told by the Ecuadorean Minister of Security.

I find it hard to get too worked up about the fact that Clinton hasn't released her tax returns, but her response when the issue was raised during the last debate was an insult to our intelligence:

MR. RUSSERT: Senator Clinton, an issue of accountability and credibility. You have loaned your campaign $5 million. You and your husband file a joint return. You refuse to release that joint return, even though former President Clinton has had significant overseas business dealings. Your chief supporter here in Ohio, Governor Strickland, made releasing his opponent's tax return one of the primary issues of the campaign, saying repeatedly, "Accountability, transparency." If he's not releasing, his campaign said, his tax return, what is he hiding? We should question what's going on. Why won't you release your tax return, so the voters of Ohio, Texas, Vermont, Rhode Island know exactly where you and your husband got your money, who might be in part bankrolling your campaign?

SEN. CLINTON: Well, the American people who support me are bankrolling my campaign. That's -- that's obvious. You can look and see the hundreds of thousands of contributions that I've gotten. And ever since I lent my campaign money, people have responded just so generously. I'm thrilled at so many people getting involved. And we're raising, on average, about a million dollars a day on the Internet. And if anybody's out there, wants to contribute, to be part of this campaign, just go to HillaryClinton.com, because that's who's funding my campaign. And I will release my tax returns. I have consistently said that. And I will --

MR. RUSSERT: Why not now?

SEN. CLINTON: Well, I will do it as others have done it: upon becoming the nominee, or even earlier, Tim, because I have been as open as I can be. You have -- the public has 20 years of records for me, and I have very extensive filings with the Senate where --

MR. RUSSERT: So, before next Tuesday's primary?

SEN. CLINTON: Well, I can't get it together by then, but I will certainly work to get it together. I'm a little busy right now; I hardly have time to sleep. But I will certainly work toward releasing, and we will get that done and in the public domain.

She's too busy to spend ten minutes calling her accountant and telling him to make some photocopies? Does she take us for complete idiots?

DeLong--Berkeley professor, former Treasury official, and perhaps the most well-known liberal economics blogger--announced earlier that he'd voted for Obama in the California primary. Today, he goes a bit further and writes that Obama "would be the stronger candidate--and I think we have good reason to judge that he would make a better president as well. So I enthusiastically endorse Barack Obama as the Democratic candidate for president in 2008."

Tuesday, March 4, 2008

As this post from the Carpetbagger Report makes abundantly clear, it's not just that McCain doesn't understand economics--he doesn't even know what his own positions are on key economic policy issues like Social Security and taxation. What worries me is that, given the level of contempt by political journalists for policy discussion, McCain's utter ignorance might not be a problem for him. This New Yorker article shows that McCain is so chummy with the press on-board his bus that he rarely is even asked about his incoherent policy statements. Those hard-hitting journalists at CNN did, however, manage to get him to let his guard down long enough to reveal his barbecued ribs recipe.

Although it seems totally nuts, there is now a non-negligible chance that Venezuela and Ecuador will start a war with Colombia. A crisis has erupted after Colombia killed the number two leader of the FARC guerrilla group, on the Ecuadorean border. Here is Obama's statement on the matter:

The Colombian people have suffered for more than four decades at the hands of a brutal terrorist insurgency, and the Colombian government has every right to defend itself against the Revolutionary Armed Forces of Colombia (FARC). The recent targeted killing of a senior FARC leader must not be used as a pretense to ratchet up tensions or to threaten the stability of the region. The presidents of Colombia, Ecuador and Venezuela have a responsibility to ensure that events not spiral out of control, and to peacefully address any disputes through active diplomacy with the help of international actors.

This hits the right notes, supporting the Colombian government and urging diplomacy. Clinton, McCain, and the Bush administration have made similar statements. I wonder, though, what Bush is going to do (and what the candidates will say) if Ecuador and Venezuela attacks Colombia and Colombia asks for U.S. military support.

Monday, March 3, 2008

Obama's Patriot Employer Act provoked a bizarre column by a couple of European economists who consider it to be evidence of "dangerous protectionism." (See here for a roundup of responses to the column.)

The legislation would provide a tax credit equal to 1 percent of taxable income to employers that fulfill the following conditions:

Not decrease their ratio of full-time workers in the United States to full-time workers outside the United States and maintain corporate headquarters in the United States if the company has ever been headquartered there.

Pay a minimum hourly wage sufficient to keep a family of three out of poverty: at least $7.80 per hour.

Provide a defined benefit retirement plan or a defined contribution retirement plan that fully matches at least five percent of each worker’s contribution.

Pay at least sixty percent of each worker’s health care premiums.

Pay the difference between a worker’s regular salary and military salary and continue the health insurance for all National Guard and Reserve employees who are called for active duty.

Maintain neutrality in employee organizing campaigns.

Via Greg Mankiw, Jagdish Bhagwati, the most rabid free-trader economist you could find, published a surprisingly good column in the FT titled "Obama's free-trade credentials top Clinton's." The column is a far better reply to the "protectionism" column than I could have come up with.

Bhagwati interprets the Patriot Employer Act as essentially a symbolic act that is unlikely to have much effect:

.... Mr Obama has smartly seized John Kerry’s proposal to remove the incentive to invest abroad and has gone further by proposing that those who invest at home will be given a tax incentive. It is dubious that this proposal will survive challenges from existing bilateral and World Trade Organisation agreements, or can achieve much when other countries can do the same. It is exactly the sort of policy that a constituency fearful of losing jobs demands but, by meeting that demand, President Obama would be left free to abandon the anti-trade rhetoric and embrace the multilateral free trade that has served the American and the world interest so well.

It's probably true that Obama figures that the Patriot Employer Act is a good response to the anti-trade forces. But I think he genuinely believes what he said in the press release about the bill:

Our bill will create a new patriotic corporate ethic in America that unites workers and their employers in the mutual goal of building a stronger, more prosperous democratic business sector to compete in the twenty-first century global economy.”

While the forces of globalization are not going to go away, modern economic theory offers a number of reasons to think that the goals of this proposal are sensible, if a bit lofty. Perhaps most familiar to the typical economist is the idea of "efficiency wages," which suggests that employees who receive better compensation are more productive. Related to this is the concept of high road / low road labor organization. Very briefly, the idea is that firms have a choice between the "high road" with high wages, high rates of employer retention, high investment in employees, and high productivity, or a "low road" with all the opposite qualities. In this view, a goal of government policy might be to encourage firms to take the high road. Finally, there is a variety of research in labor economics that suggests that institutions and norms are as important as market forces in establishing worker relations. The bill could have the effect of helping to shift the norms of corporate employment in America for the better.

(I wondered how much this bill could cost. According to data on this IRS page, in 2004 the total taxable income of corporations was $772 million, which means that if every single corporation qualified as a "Patriot employer," the annual cost would be below $8 billion, less than the monthly cost of the Iraq war.)

Sunday, March 2, 2008

A long article in the NY Review of Books considers whether Clinton might push the fight to the convention and how that might play out.

A few thoughts on points not mentioned in the article:

1) As discussed in this earlier post, if there's a fight over the issue, whether or not the Michigan and Florida delegates are seated at the convention will ultimately be decided by the convention delegates themselves at the beginning of the convention. Superdelegates (but not the contested Michigan and Florida delegates) participate in this vote. Conceivably, Clinton could be behind in pledged delegates but get the Michigan and Florida delegates seated on the basis of superdelegate strength.

2) The superdelegates are self-interested actors. Many of them are elected officials and it is in their strong interest to avoid earning the wrath of a large segment of voters. For this reason, I think it is very unlikely that the superdelegates would swing victory to Clinton if she lost among pledged delegates.

3) Publicly the Clinton campaign has suggested it will fight until the very end. There's no way for the Florida and Michigan issue and the superdelegate votes to be decided before the convention without the agreement of both campaigns. This makes me think Hillary will indeed hold out for pulling out a victory at the convention. Even if her odds are low, she has every incentive to keep the battle going. If she fights, in the positive scenario (i) she's president, while in the losing scenario, (ii) she's still a U.S. senator, although possibly one blamed for splitting the party and hurting the Democrat's chances at the White House. If she doesn't fight, (iii) she's a U.S. senator and applauded for not having split the party. This is the classic sort of choice one can model with game theory, assuming valuations for each outcome and probabilities for the winning and losing scenarios. My guess is that she attaches extremely high value to outcome (i) (being president) and nearly equivalent values to outcomes (ii) and (iii). In other words, for her the value of being president is so much greater than the cost of being blamed for splitting the party that she will stay in the game as long as there's any chance of winning.